191. Telegram From the Mission to the United Nations to the Department of State 1

3944. Subj: Special Comite on Financial Situation of UN.

Summary: Comite of 15 held 17th mtg Oct 11 to consider draft interim report for later submission to GA. Comite treated to lengthy interpretation of history by Sov Perm Rep Malik, including charge that US had “done nothing” to help resolve problem and, in fact, would be contributing to problem by attempting to reduce its assessment to 25 percent. US rep (Schaufele) rebutted Malik’s statement. US Del intends to set record straight when item comes before Fifth Comite.

1.
Comite held 17th mtg Oct 11 to consider draft interim report (A/AC.155/R.17) to be submitted to GA at current session. Report drafted by UNSec, with personal input by Amb Algard, was immediately opened for comment by chairman. All members present except PRC.
2.
For next half hour, Comite treated to interpretation of history by Sov Perm Rep Malik. His position, stated in stern and uncompromising manner, not only rejected proposals previously agreed to by twelve members, but would require report to be completely rewritten because it lacked objectivity. On latter point Amb Algard took strong exception, saying that, as chairman, he had attempted to reflect Comite proceedings and proposals previously agreed to in Comite.
3.
Malik opened with fact that UN presently in difficult financial situation, but then added this due solely to ONUC and UNEF operations carried out “under UN flag” and in “violation of UN Charter.” He argued that these were illegitimate activities, as were Korean items and UN bonds. Consequently, he said that, because of illegal character of these activities, USSR and others were justified in withholding payments. On question of technical assistance in UN regular budget, Malik said its inclusion was contrary to “accepted standards” and, in order to “comply with spirit and letter of Charter,” it had to be removed so that regular budget be limited solely to UN administrative costs.
4.
According to Malik, USSR had agreed in 1965–1966 to participate in efforts to find solution to financial problems of UN on two conditions: (1) all member states must participate, and (2) US must declare first its intention to make voluntary contribution and announce amount of its contribution. Since then, he said, US had maintained “total silence” and done “absolutely nothing” to solve problem, which was in total disregard of consensus. Malik next turned to strong criticism of US for attempting to reduce its assessment rate at time when UN was in serious financial condition. In so doing, he said, US was acting irresponsibly since, rather than reducing its assessment, US should be paying much more based on its capacity to pay. If US intended unilaterally to reduce its assessment, he wondered what would prevent other member states from doing likewise. If they did, Malik said financial integrity of UN would be destroyed, and possibility would be greatly increased of UN following in footsteps of League of Nations, etc.—for which US would be responsible.
5.
US (Schaufele) responded immediately to Malik’s assertions, saying US had hoped Comite had gone beyond point of political rhetoric and was well on its way toward progress in finding solution to deficit problem; however, unfortunately, this stage had not been reached, as witnessed by remarks of Sov Rep. Schaufele made these additional points:
(A)
1965–1966 consensus did not include condition that US be first to announce voluntary contribution;
(B)
Rather than maintaining “total silence,” US had stated continuously that, “if comprehensive solution found, US would not be found wanting”
(C)
Questions relating to UN peacekeeping should be discussed in Comite of 33 and kept out of this Comite;
(D)
Similarly, this Comite was not forum to discuss question of UN scale of assessments since item would be dealt with fully in Fifth Comite;
(E)
Pointed out that US contributing more than 38 percent of total to UN activities and said US would welcome USSR contributing at same level;
(F)
Stressed that, rather than giving his interpretation of history, Malik could do Comite and membership as a whole real service if he would answer directly question of whether or not USSR intended, and in what way, to help resolve financial problem.
6.
Our rebuttal brought forth another statement by Malik, in which he argued that historical facts re UN activities must be respected and, quoting Tolstoy, said “I cannot be silent” in establishing clear record of reasons for UN financial problem. Furthermore, with US capacity to pay of 38 percent and proposed new ceiling on US of 25 percent, he repeated that “If US can justify reducing its assessment, why can’t others follow?” Unlike US, many would have a justifiable case. By implication, he put USSR in latter category, saying USSR was a “poor country” in relation to US, had suffered through two hundred years of aggression and destruction, which took heavy toll including twenty million lives alone lost in World War II.
7.
Ghana (Cleland) directed two-part question to Malik. First, he asked whether USSR would agree to transfer of technical assistance from regular budget to UNDP; and second, whether, in making this transfer, USSR agreed that voluntary contributions must be in same amount as included in regular budget and paid in convertible currencies. Malik answered first point in affirmative, but on latter said it was “sovereign right” of contributors to determine currencies in which they would make voluntary contributions. Rather than answering whether USSR would contribute, Malik made lengthy comment on tremendous effort USSR had made in providing funds to LDCs to assist them in their development.
8.
India and Brazil, commenting on proposal that technical assistance be transferred from regular budget, said this was not acceptable to them since important matter of principle was involved which required UN itself to include small amount of technical assistance in its regular budget.
9.
Canada, Japan, UK, and France also spoke, expressing regret that Comite’s proposals previously agreed to were not acceptable. French Rep said “I deeply resent” fact that Comite, which heretofore had been characterized by spirit of compromise and determination to find solution, had now become subjected to political rhetoric. Nigerian Rep said that, on basis of what he had heard today, Comite of 15 for all practical purposes was “finished.”
10.
Chairman announced that number of drafting changes suggested by reps would be incorporated in report and redraft be provided members by Oct 19. Said he would call another mtg of Comite a week or so after redrafted report circulated. Added that his intention was to submit interim report to GA at present session, have Fifth Comite discuss report, and on basis of this discussion determine what [Page 352]new elements, if any, surfaced for consideration by Comite of 15 before drafting final report to GA.
11.
Following mtg Schaufele and MisOff discussed situation briefly with Amb Algard. Latter said that, while he would make some drafting changes, he was determined that report would reflect Comite proceedings and agreed proposals while at same time show without question where responsibility lay for lack of further progress.
12.
Comment: During period since Comite mtg, MisOffs have been told informally by number other Comite members that they disappointed and angered over position taken by Malik. However, some appeared be uncertain about 1965–1966 consensus, in particular Malik’s assertion that there was agreement on US making first move by announcing what it intended to do to help resolve financial problem. US del intends to set record straight when item comes before Fifth Comite.
Bush
  1. Source: National Archives, RG 59, Central Files 1970–73, UN 10–4. Confidential.